Sports betting ads are everywhere. Gamblers will pay a steep price, some fear : NPR

A new era of legalized betting is taking root across the U.S., one that is radically reshaping what it means to watch professional and collegiate sports.

For many fans, the days of the once-a-year Super Bowl office pool are a distant memory. Betting on sports in much of the country is now as easy as tapping an app on your phone.

Sportsbooks such as DraftKings and FanDuel — companies that set odds and take bets — have unleashed an advertising storm, intent on scooping up as many customers as possible. If you’ve driven past a billboard, turned on a TV or used the internet lately, odds are you’ve seen an ad for sports betting.

States regulate how sportsbooks can operate but give companies wide latitude over what they can say in advertisements — a break from the constraints on other industries where there is a risk of addiction, such as tobacco. And there are no advertising rules specific to the sports betting industry at the federal level. The limited oversight has raised alarms for some, including advocates who worry about the potential risks for those with a history of problem gambling and people too young to bet.

Spectators now wager tens of billions of dollars each year on games they once watched with little or no financial interest. The boom in sports betting comes as there has been an increase in inquiries to the National Problem Gambling Helpline Network, which received 270,000 calls, texts and chats last year — a 45% jump over the prior year.

Vin Bickler is all too familiar with those statistics. Bickler, who said he is in recovery from a gambling problem, now answers the help line at the Council on Compulsive Gambling of New Jersey.

He said he receives calls from everyone from young men in their 20s to elderly widows who are struggling to stop their compulsive gambling — both on sports and in online casinos — amid the nonstop barrage of ads.

“The advertising is just like the old beer ads and the cigarette ads that were on TV for years. It’s the same situation,” Bickler said. “People are being sucked into thinking that it’s glamorous, thinking they’re going to win, and they don’t win. In the end, they lose everything.”

A Supreme Court ruling helped launch the betting boom

Not long ago, sports betting was banned everywhere in the United States except Nevada.

That changed in 2018 when the U.S. Supreme Court overturned the Professional and Amateur Sports Protection Act and permitted states to decide for themselves whether they wanted to legalize sports betting.

Thirty-five states and Washington, D.C., have legalized sports betting since the decision, and more could be on the way, according to the American Gaming Association, an industry trade group.

The court’s ruling wasn’t the only major evolution in the world of sports betting. Four of the country’s major sports leagues — the NBA, NFL, NHL and MLB — as well as the NCAA, once vehemently opposed legalized betting on games and pushed for the Supreme Court to maintain the embargo.

But since the 2018 opinion, the leagues have come to not only accept sports betting, but champion it. The four professional leagues have entered into partnerships with major sportsbook operators, and TV broadcasts now routinely display odds during games.

Last year, the sports betting industry exploded, recording $57.2 billion in handle — an insider’s term for the amount of money wagered — the AGA reported. That amounted to $4.29 billion in revenue for an industry that was forbidden almost everywhere in the U.S. four years ago.

Meanwhile, some states have hit the jackpot. Pennsylvania and New Jersey, both of which legalized sports betting in 2018, have each raked in more than $225 million in taxes, according to figures compiled by the website Sports Handle.

Companies have spent big on advertising, with little pushback

Seeing the potential for sky-high profits, sportsbooks are dumping money into advertising.

Companies have spent hundreds of millions of dollars on sweeping ad campaigns in a bid to swallow up new customers. Caesars Entertainment, for example, at one point vowed to spend $1 billion to market its sports betting app.

Scant regulation has followed. Most states, at a minimum, require sportsbooks ads to spell out the legal gambling age and include information about how problem gamblers can seek help, such as listing the phone number for a gambling addiction hotline.

But in the absence of more targeted regulation from states and the federal government, sportsbooks face little interference when it comes to how many ads to run and what they say in them.

“Most of the states that are legalizing and regulating sports gambling, they say they’re regulating and taxing, but it’s really more about taxation than about regulation,” said Marc Edelman, a professor at the Zicklin School of Business at Baruch College.

One gap in the regulations, in Edelman’s opinion, is that there is no prohibition on running sportsbook commercials at times when people too young to gamble may be watching TV in high numbers. The legal gambling age is 21 in most states but as low as 18 in some.

“If gambling is not legal for those who are under 21, then it probably would not make sense to allow advertising to be targeted on programming where a reasonable share of the population is under 21,” he said.

On top of that, people too young to gamble and people with gambling problems may also be unable to watch a sporting event on TV without seeing a sports betting ad or hearing the announcer discuss gambling. Studies in other countries with legal sports betting have found a link between sportsbook advertising and riskier betting behavior. Edelman suggested that leagues offer an alternate “clean” broadcast devoid of any gambling content.

Can a wager be “risk-free”?

One of the more controversial aspects of the marketing boom is the promotions used to entice new gamblers.

Common promotions include sportsbooks offering a “risk-free” bet of, for example, $100. That typically means that bettors who put up $100 of their own money and lose will get the same amount credited to their account to bet again, but sportsbooks might not return the actual money gamblers initially bet.

Some sites offer a bonus bet of, say, $50 for signing up with the service. Players could bet that $50 without spending their own money, but if they win $150 on a bet with 3-1 odds, they may only receive $100 while the company keeps the original “bonus” stake.

Colorado, for one, does have some regulations on sportsbook ads offering promotions. The state allows the offers but requires companies to include terms that are clear and accurate, and it prohibits describing anything as “risk free” if customers can lose their own money.

“We have rules and regulations around advertising, and mostly it focuses on consumer protection,” said Dan Hartman, director of Colorado’s Division of Gaming. “They can’t advertise anything that’s untrue.”

Others have taken a dimmer view of these promotions. Earlier this year, New York Attorney General Letitia James warned consumers ahead of the Super Bowl to avoid “scammers” when placing their wagers. She cautioned bettors to be wary of offers like “risk-free” bets and bonuses, common tactics used even by the large mainstream sportsbook operators.

The U.S. isn’t regulating sports betting ads, but other countries do

Italy imposed a blanket ban on gambling advertising in 2018. The United Kingdom recently outlawed the appearance of celebrities and sports stars in sports betting ads. Nations from Belgium to Australia to Chile are considering ad restrictions for the sector.

Here in the U.S., advertisers are required to be truthful and not misleading in their messages to consumers, but that’s largely the extent of federal oversight of the sports betting industry. In 2018, Sen. Chuck Schumer, D-N.Y., and then Sen. Orrin Hatch, R-Utah, introduced a bill that would have standardized the rules on advertising around online sports betting, but the measure ultimately stalled.

“We do have the Federal Trade Commission, which is responsible for investigating advertising and certainly could take action if they saw something as fraudulent or misleading,” said John Holden, an assistant professor at Oklahoma State University and an expert in sports betting and gambling regulation. “But it’s not clear at the moment that they have their sights set on gambling advertisements.”

Industry leaders say there’s no need for federal regulators to intervene.

“I don’t think the federal government has a role to play in regulating this,” said Casey Clark, senior vice president for the American Gaming Association. “I think it would become challenging on a lot of levels.”

Clark suggested the gambling sector has the ability to police itself, pointing out that the association has published a set of voluntary standards that sportsbooks and other sports gambling businesses could follow when advertising. The standards include not appealing to people too young to gamble and not promoting “irresponsible or excessive participation” in sports betting.

Clark also defended the promotions and offers frequently advertised by major sportsbooks, saying they’re a way to raise visibility for the industry.

“It is a careful line to be walked, for sure,” he said. “But I also believe that they’re instrumental in bringing customers away from the illegal market and into the regulated marketplace.”

Despite the industry’s opposition, advertising experts say there is precedent for regulating the advertising of products and services that could pose a risk to the public.

Tobacco companies, for instance, are barred from marketing to children or using cartoons in their ads, and the Food and Drug Administration requires cigarette companies to post health warnings on their products.

People with a history of problem gambling are being harmed, advocates say

For now, sportsbooks are the ones that decide how to advertise their services.

It could be the actor JB Smoove playing Julius Caesar in a TV ad campaign for Caesars Entertainment or former New Orleans Saints quarterback Drew Brees urging you to “live your bet life” in an ad for PointsBet. Maybe it’s a website ad or a highway billboard from DraftKings or FanDuel offering a sign-up bonus.

The ads can feel ubiquitous. That can be harmful to people with a gambling addiction or those in danger of developing a problem, advocates say.

“We expect that there is a higher rate now of people who were in recovery that have been lured back or tempted back into betting again due to the massive volume of ads,” said Keith Whyte, executive director of the National Council on Problem Gambling.

New gamblers are starting to bet on sports for the first time, said Whyte, while existing bettors are now spending increasing sums on sports betting.

According to a poll conducted by Morning Consult in December, 1 in 5 Americans said they bet on sports at least once a month. That was an 80% increase over the number who reported betting with the same frequency last January.

The National Problem Gambling Helpline Network saw a dip in inquiries in 2020 compared to previous years. But the number of calls it fielded last year — 270,000 — was the highest for the help line in at least six years.

That’s likely a result of more people gambling, Whyte said, as well as more people seeking help for gambling problems as more advertisements also means more awareness of addiction resources.

Whyte estimates there are almost 7 million people with gambling problems in the U.S.

Whyte says companies and sports leagues aren’t doing enough to curb problem gambling, and neither are the state governments that stand to win from the tax revenue generated by the surge in betting.

“States are making so much money they’re falling over themselves to expand and expand in new and novel ways, like online and mobile,” Whyte said. “And rarely are they putting any sort of significant funding into counterbalancing that expansion with efforts to prevent and treat gambling addiction.”

Holden, the sports betting expert, suggested this is partly because attitudes toward gambling in the U.S. have changed. At certain points in the country’s history, gambling was considered as bad as or even worse than other vices, such as smoking or drinking, he said. Now, gambling is both widely accepted and tacitly endorsed by state governments that, in many cases, operate their own lotteries and also reap the tax benefits from casinos and online gaming.

“I think, in some ways, gambling is viewed by society as somehow less harmful than drinking or smoking. Gambling addictions are incredibly devastating, so it’s perhaps misguided to think that,” he said.

Bickler, who operates the New Jersey help line, says that’s especially true given the growth of not just sports betting but all online gambling — and the explosion of advertising meant to entice people to bet.

“You can’t watch TV in prime time or listen to any radio station without hearing gambling site ads. They are all around us,” Bickler said. “The spread of the addictive issues just has been horrendous and so widespread.”

If you or someone you know may have a gambling problem, you can call or text The National Problem Gambling Helpline Network at 1-800-522-4700 or chat with a specialist online. Inquiries are answered 24/7 and remain confidential.